Mulberry has reported increased financial losses in the first half of the year, prompting strategic changes by its new CEO.
- Losses for the luxury brand reached £15.7m, an increase from £12.8m last year, alongside a 19% drop in sales.
- CEO Andrea Baldo has been in position for under three months and emphasises a shift in brand focus.
- The company is streamlining operations and adjusting product and pricing strategies to improve margins.
- A previous takeover bid by Frasers Group was declined, sparking concerns about governance and future plans.
Mulberry has announced a significant rise in its half-year losses, which have reached £15.7 million for the 26 weeks ending 28 September 2024. This figure marks an increase from £12.8 million in the previous year, accompanied by a 19% decline in sales, totalling £56.1 million. These figures underscore the financial challenges facing the luxury brand under current market pressures.
In response to these setbacks, Andrea Baldo, who has recently assumed the role of CEO, has highlighted the urgent requirement to refocus and rebuild the business. Baldo stated, ‘Though I’ve only been in the role of CEO for under three months, the first half results illustrate the clear need to reprioritise and rebuild the business.’ Such comments reflect a strategic shift aimed primarily at revitalising the brand’s appeal among UK consumers before turning attention to the international market.
The company is adopting decisive measures to streamline operations, aiming to enhance margins, reduce working capital, and fortify its cash position. This includes a review of its internal team structure, which may lead to job redundancies. Additionally, Mulberry is adjusting its product range, pricing, and distribution strategies to better align with market demands and consumer expectations.
Amidst these efforts to stabilise and grow the business, Mulberry has recently rebuffed a takeover attempt by Frasers Group. A revised cash offer of 150p per share, valuing the company at £111 million, was deemed unsuitable by Mulberry’s board. The decision followed the majority shareholder Challice’s refusal to entertain the offer or engage in further negotiations with Frasers.
Despite the rejection, Frasers Group has expressed discontent, citing concerns over Mulberry’s governance and the absence of a clear commercial plan amidst challenging economic conditions. The retailer continues to advocate for a representative on Mulberry’s board to address these issues.
Mulberry’s strategic adjustments signal a crucial moment for the brand as it seeks to overcome financial hurdles and secure its market position.
